The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) released a trend report on Tuesday, shedding light on the growing utilization of Bitcoin and other cryptocurrencies in illicit activities, particularly in human trafficking and the sexual exploitation of children.
Based on data from financial firms’ government filings in 2020 and 2021, the report reveals a concerning surge in crypto-related crimes, with Bitcoin emerging as the preferred medium for such transactions.
Sharp rise in crypto usage for illegal activities
According to the analysis, there were 2,311 reported instances of cryptocurrency use in crimes related to human trafficking and child sexual exploitation, amounting to over $412 million. The data indicates a significant increase from 2020 to 2021, with 1,975 reports recorded in the latter year, starkly contrasting the 336 reported cases in 2020.
The report underscores the distressing reality of victims being coerced into forced labor, slavery, and commercial sex acts, underscoring the dire consequences of such illicit activities.
A majority of the cases evaluated in the report involved the exchange of cryptocurrency for “child sexual abuse material” (CSAM), often facilitated through darknet marketplaces, crypto kiosks, or transactions conducted via mixers.
Changing dynamics in crypto transactions
While the report provides crucial insights into past trends, it acknowledges the evolving nature of cryptocurrency transactions and the methods employed by perpetrators.
Notably, the period analyzed predates significant market shifts, including the crypto winter and subsequent recovery, suggesting potential fluctuations in criminal behavior since then.
FinCEN Director Andrea Gacki emphasized the critical role of financial institutions in flagging suspicious activities, asserting that heightened awareness and vigilance are essential in combating the exploitation of vulnerable individuals for financial gain.
The report suggests that increased scrutiny from regulatory bodies and financial firms may have contributed to the rise in reported cases of crypto-related crimes.
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